INspiRE Jean-Monnet-Centre of Excellence - Case Law: Flughafen Lübeck-Case
In the case “Airport Lübeck“ the Federal Court of Justice addresses the question, to what extent a preliminary decision of the Commission in a formal investigation proceeding on potential State aid is binding for national courts.
In this case, the dispute was about an agreement between the – until 2015 state-run – Flughafen Lübeck GmbH and Ryan Air from 2000 until 2004. The (rival) plaintiff Air Berlin believed that this agreement constitutes a “State aid” violating European law, therefore claimed information about these measures and demanded omission.
Parallel to a lawsuit in front of the national court (LG Kiel), which ended in the first instance with a partial verdict in favour of the suing competitor, the Commission initiated formal investigation proceedings according to Article 108 of the TFEU by order of 10 July 2007 (OJ C 287, 29.11.2007, p. 29). In their opening decision the Commission stated, that some of the agreements are “likely to entail State aid”.
The court for the appeal on points of fact and law (Higher Regional Court – OLG Schleswig) asked the Commission, if the measures in question constitute a State aid according to Article 108 (3) sentence 3 of the TFEU. In their opinion of 8 March 2012, the Commission decided that the agreements were an aid “prima facie”. An assessment under state ad law by the national court is to be dispensable.
After this, the national court of appeal on points of fact and law filed a request for a preliminary ruling by the ECJ by order of 14 January 2013 (6 U 54/06), concerning the scope of the binding effect of a preliminary decision by the Commission. Furthermore, the court asked, if they can and must stay their proceedings until the formal investigation has been completed.
The ECJ ruled by order of 4 April 2014 (C-27/13), that the court of appeal on points of fact and law is not allowed to pronounce a judgment adversely affecting the proceedings of the Commission under the principle of sincere cooperation with the European institutions (Article 4 (3) of the TEU). Instead, the court is obligated to take all necessary actions to draw conclusions from any potential violation of the obligation to stay the performance of these measures (mn. 27). The proceedings of the national court shall not be stayed until the Commission has made their decision, as, otherwise, there would be no decision concerning the aids until this point in time and therefore the (potentially unlawful) benefits of the aid would be upheld (mn. 30).
During the appeal on points of law after the judgment of the Higher Regional Court Schleswig of 8 April 2015 (6 U 54 /06) following the answer of the ECJ to the preliminary questions, the Federal Court of Justice confirmed, that national courts cannot run contrary to the proceeding of the Commission due to their obligations under European law.
At the same time, the Federal Court of Justice emphasised that the – solely preliminary – order of the Commission does not constitute a binding effect for the German courts. On the one hand, the independence of the national courts is opposed to a binding effect of an assessment – even of European – administrative bodies. On the other hand, the investigation proceedings according to Article 108 of the TFEU do not grant sufficient legal protection of the parties, as they do not contain adequate rights to be heard. The only available legal protection by an action for annulment in front of the General Court is not sufficient. With regard to Article 47 of the CFR and Article 19 (4) of the Basic Law (Grundgesetz – GG) the parties are entitled to a right to be heard in front of the national courts, as they cannot be prevented from casting doubt before the national courts on the Commission’s preliminary assessment under State aid law, which constitutes a burden on them, so long as the Commission has not yet come to a final, incontestable decision (mn. 46). In the case of reasoned doubt regarding the preliminary assessment of the Commission, the national courts have to ask the Commission for an opinion or - as a last consequence - have to request a preliminary ruling by the ECJ.
Furthermore, the Federal Court of Justice referred to the reciprocal obligation of sincere cooperation, which is also binding for the European institutions. If the Commission does not make a final decision within reasonable time, the national courts on the other hand have to rule on the basis of the preliminary assessment de facto (contrary to the jurisdiction distribution set forth in the treaties). Due to this there is the risk, that there will be a function shift from the Commission to the national courts, as the preliminary decision of the Commission would be subject to a claim for repayment which would have to be enforced by a national court. This would lead to a circumvention of the - for proceedings concerning unlawful State aids - generally applicable Article 13 of the Regulation 2015/1589.
More importantly, the obligation to sincere cooperation also demands from the Commission to close administrative proceedings within a reasonable time.
In an express rejection of their previous case law, the Federal Court of Justice came to the conclusion, that the national courts can only deviate from the preliminary assessment as a State aid after the opening decision of the Commission, if they had asked the Commission for an opinion or requested a preliminary ruling by the ECJ. This being said, the preliminary assessment should principally be respected (mn. 35).
The previous line of judgments, that it is for the national courts to interpret the term State aid within the examination of a violation against the ban on implementation, as long as the Commission has not issued a closing decision according to Article 108 (2) of the TFEU, has explicitly been abandoned.